Tribunal dismisses limitation objection, grants moratorium under Insolvency and Bankruptcy Code

The Tribunal dismissed the objection regarding limitation, overruled the competency of the Power of Attorney holder, and found the default established by the financial creditor. Consequently, the application under section 7(2) of the Insolvency and Bankruptcy Code was admitted, and a moratorium was declared. The Interim Resolution Professional was appointed, and the petition was disposed of with no order as to costs.

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Issues Involved:
1. Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is barred by limitation.
2. Whether the Power of Attorney holder is competent to file the application on behalf of the financial creditor.
3. Whether the petitioner has established the default on the part of the respondent.

Detailed Analysis:

Issue 1: Limitation of Application
The respondent argued that the application filed in August 2018 is time-barred. The Tribunal examined the records and found that the applicant bank had placed on record a letter dated 28-2-2013 approving the sanction of the bank's stand on the final restructuring package under the CDR mechanism, which was accepted by the respondent. Additionally, the respondent had acknowledged the financial debt in the balance sheet as of 31-3-2017. Since the application was filed on 21-8-2018, it was within the limitation period. Therefore, the objection regarding the limitation was dismissed.

Issue 2: Competency of Power of Attorney Holder
The respondent contended that the Power of Attorney holder was not competent to file the application. The Tribunal referred to the decision of the Hon'ble National Company Law Appellate Tribunal in Palogix Infrastructure (P.) Ltd. v. ICICI Bank Ltd., which stated that a general authorization by a financial creditor in favor of its officers to handle legal proceedings is sufficient. The use of the term "Power of Attorney" does not negate the authority of the officer, and such an officer can be treated as an authorized representative for filing applications under sections 7, 9, or 10 of the IBC. Hence, the objection was overruled.

Issue 3: Establishment of Default
The respondent claimed that the petitioner failed to establish the default. The Tribunal noted that the corporate debtor had availed various credit facilities from the petitioner bank and had acknowledged the debt from time to time. The debt recovery proceedings initiated by the financial creditor further substantiated the claim of default. The Tribunal found that the evidence presented by the financial creditor, including various agreements and notices, was sufficient to establish the default. The Tribunal also referenced the Hon'ble Supreme Court's judgment in Innoventive Industries Ltd. v. ICICI Bank Ltd., which stated that the Adjudicating Authority needs to verify the occurrence of default based on the records provided by the financial creditor.

Conclusion:
The Tribunal concluded that the corporate debtor had committed a default in paying the financial debt to the applicant. The application under section 7(2) of the Code was found to be complete in all respects. The Tribunal admitted the petition and declared a moratorium prohibiting the institution or continuation of suits or proceedings against the corporate debtor, transferring or disposing of assets, and recovery of property by owners or lessors. The supply of essential goods and services to the corporate debtor was directed to continue during the moratorium period. The Interim Resolution Professional, Mr. Vikas Prakash Gupta, was appointed, and the petition was disposed of with no order as to costs. Copies of the order were directed to be communicated to the applicant, respondent, and the Interim Resolution Professional.

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